Retail-trend watchers label online sales a game changer

— Retail executives and consultants on Wednesday described a rapidly changing environment in retailing as online purchases account for an ever-growing share of sales.

The event was the 12th annual Emerging Trends in Retailing Conference, heldat the Donald W. Reynolds Center for Enterprise Development on the University of Arkansas campus in Fayetteville.

Darrell Rigby, a partner in Bain & Co., noted that U.S. retailing tends to reinvent itself about every 50 years, starting with department stores in the 1860s, malls inthe early 1900s, discount formats in the 1960s and now, the move to digital.

“That one I would not want to bet against. It is inescapable,” he said, and a “natural way of life” for more and more customers. And increasingly, he said, shoppers are using mobile devices as their preferred way of shopping.

Rigby cited research that found 80 percent of 18- to 24-year-olds, and 50 percent of adult Americans, sleep with their cell phones. A separate poll asking what people can’t live without, he said, found sunshine listed first, followed by Internet connections and clean drinking water.

Wanda Young, senior director for social media strategy at Bentonville-based Wal-Mart Stores Inc., said having a leadership team willing to innovate is “core to the roots of Wal-Mart.” And, she said, the company has a shorthand moniker, DBAD (don’t be a dinosaur), to remind employees to look ahead.

Social technology, Young said, is bringing the company closer to its customers, adding that “the Wal-Mart customers are incredibly engaged.”

“This technology lets us listen to our customers,” she said. “Sharing is powerful. Don’t underestimate what that brings to the relationship.”

Mike Fox, director of global vertical marketing for social media giant Facebook, said retailers need to connectwith their online “fans” in ways more important than a mere fan count. Fans are not valuable to a retailer, he said, if they are not also regular customers.

But if those fans weigh in online in a positive way, he said, it’s a “massive asset. It’s so much better to have your customers tell your story for you.”

Andy Murray, founder and chief executive of marketing technology firm Mercury 11, cited a survey of 700 chief executive officers that found that technology is the No. 1 factor in “keeping them up at night.”

Many retail leaders, typically over age 40, don’t quite understand how disruptive changing technology can be to their business model, Murray said. Companies are now relying more on “Generation Y,” those born starting in the early 1980s, for leadership in the digital age.

One drawback, he said, is that many in that generation come up short in organizational skills.

Murray said he would place big bets on areas such as mobile collaboration and on search and social media.

“I would double down on that,” he said.

Jason Lucash, co-founder and business development director of OrigAudio, described how he and a partner developed low-cost audio speakers using recycled cardboard - a move thatultimately landed them in a feature story on new inventions in Time magazine.

Starting with a $30,000 investment from his mom and a total investment with assistance from others of $150,000, the California start-up generated $750,000 in sales in the first year, he said.

“We’re picking up more and more retailers every day,” he said, and his market has expanded to 38 countries.

Business, Pages 29 on 10/18/2012

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